The stepped-up merger frenzy of gas pipeline companies has takenits toll on the Interstate Natural Gas Association of America(INGAA), which announced Friday it was downsizing its staff inresponse to its loss of members and dues.

“The energy industry — particularly the pipeline segment —is going through some upheaval, with mergers and consolidation andcompetition coming at our members from all sides. So it’s onlynatural that INGAA reflect that trend. Our member companies havedownsized to cut costs, and so must we,” said INGAA PresidentJerald V. Halvorsen.

Earlier this year, INGAA lost two members: Kinder Morgan Inc.,which purchased the financially troubled KN Energy; and Sempra Energy,parent of San Diego Gas and Electric and Southern California Gas. (SeeDaily GPI, Dec. 28) The losses arelikely to be much heavier next year if El Paso Energy continues itscurrent merger pace.

If all its deals go through, El Paso will either own or haveinterests in El Paso Natural Gas, Midwestern Gas Pipeline, SouthernNatural Gas Pipeline, Mojave Pipeline, Tennessee Gas Pipeline,Florida Gas Transmission, Texas Intrastates, ANR Pipeline, ColoradoInterstate Gas, Great Lakes Gas Transmission, Wyoming Interstateand the All American Pipeline. For INGAA, this means that insteadof getting dues from each individual pipeline, it will be paid onlyone membership fee by El Paso Energy.

Sempra’s and Kinder Morgan’s departure from INGAA meant thatabout $505,000 less went into the trade group’s coffers for 2000— $475,000 less from Kinder Morgan and $30,000 less from Sempra.INGAA member dues are based on a pipeline company’s revenues, andare capped at $475,000.

The impact of El Paso’s merger activity on the pipeline group’sbudget next year could be staggering. INGAA’s budget for this yearwas estimated at $5.2 million. In early January, it reported it had33 corporate members.

Departing from INGAA are John G. Ams, senior vice president forfinance and administration; Anne V. Roland, vice president ofcommunications and executive director of the INGAA Foundation; andLynne M. Turschmann, office manager and meetings coordinator. Eachof the three received a buyout package. Also leaving is KashkaBateman, an administrative assistant for the INGAA Foundation. Thisleaves INGAA with 17 staff members.

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